China’s gold imports via Hong Kong bounce back in August

CHINA’S gold imports via Hong Kong rebounded in August from the previous month, data showed on Tuesday (Sep 26), with the issuance of fresh quotas to local banks likely to boost shipments into the world’s top gold consumer.

Net imports stood at 39.023 metric tons in August, up 51.4 per cent from the previous month, Hong Kong Census and Statistics Department data showed. That was still below the 68.227 tons reported a year earlier.

Total gold imports via Hong Kong were up 49.6 per cent on a monthly basis at 45.237 tons, but lower than 71.855 tons in August 2022.

“The fresh quotas should see fresh imports into China, although the long (Golden week) holiday may distort these numbers to the downside,” StoneX analyst Rhona O’Connell said.

The Hong Kong data may not give a full picture of Chinese purchases because gold is also imported through Shanghai and Beijing.

China also saw higher gold shipments from Switzerland in August, data showed last week.

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Official data showed that the People’s Bank of China extended its streak of central bank gold purchases to a tenth straight month at end-August.

Concerns from onshore financial markets and the need to hedge against yuan depreciation could have supported demand for precious metals, Citi analysts said in a note dated Monday.

“Retail demand for jewellery and bullion surged in August to reach the highest monthly level since March.”

Physical gold prices in China were quoted between US$20 and US$60 an ounce over global prices in August before premiums surged to record highs of around US$135 earlier this month. <XAU-CN-PREM>

“While the rise had more to do with a supply squeeze caused by the government’s import restrictions, strong physical buying should keep the premium high into the fourth quarter,” ANZ analyst wrote in a note.

“We expect imports to pick up from next month.”

Premiums in China pulled back from record highs last week after China eased bullion import restrictions. REUTERS